How To Write A Great Business Plan

What Is a Business Plan? Business Plan –A document that outlines the basic idea underlying a business and describes related startup considerations Identifies the business opportunity Presents game plan for exploiting the opportunity Identifies factors affecting the plan Serves as the entrepreneur’s tool for raising capital

The Need for a Business Plan Primary Functions –Provides a clear statement of goals and strategies for internal use –Serves as a selling document to outsiders Provides a credible overview for prospective customers, suppliers, and investors Helps secure favorable credit terms from suppliers Opens approaches to lenders and other sources of financing

Important Factors People – founders, advisors, partners, suppliers Opportunity – the business, its customers, and competitors Context – macroeconomics and demographics Risk and Reward – anticipated consequences and responses

PeoplePeople What do they know? Whom do they know? How well are they known?

PeoplePeople Ideas are in dozen what matters are execution skills “I invest in people, not ideas.” - Venture Capital Legend, Arthur Rock.

OpportunityOpportunity Is the total market for the venture's product or service large, rapidly growing, or both? Is the industry now, or can it become, structurally attractive? –Disk drive industry vs. Information Services How will the company build and launch its product or service into the marketplace? Opportunity traps

ContextContext How does the context change the opportunities? Is the management ready for the change? How can management affect context in a positive way?

Risk and Reward How might the people, opportunity, and contextual assumptions change? How will the management team address these changes or mitigate their effects? Harvesting – What is the range of exit strategies – e.g. IPO, Acquisition by or Merger with established company

Cash Flow

Class of Investment

The Deal and Beyond From whom you raise capital is more important than the terms

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